In most areas, construction and housing were struggling in late 2025

We continue to get economic reports that were backlogged from the government shutdown that ended more than 2 months ago. This one shows what seems to be a strong report for new construction in America for October, until you look closer at the details.

U.S. construction spending increased more than expected in October, likely reflecting home renovations, with activity elsewhere weak.

The Commerce Department's Census Bureau ​said on Wednesday that construction spending rose 0.5% after falling 0.6% in ‌September. Economists polled by Reuters had forecast construction spending gaining 0.1% in October. Spending dropped 1.0% year-on-year in ‌October….

Investment in residential construction shot up 1.3% after slumping 1.4% in September. That was despite a 1.3% drop in spending on new single-family housing ⁠projects. Spending on multi-family housing ‌units, which account for a small share of the housing market, slipped 0.2%.

With both single- and multi-family housing projects falling, the increase in ‍residential outlays was likely because of renovations. Homebuilding has been hamstrung by higher mortgage rates, more expensive building materials because of tariffs on imports as well as labor shortages.

In fact, improvements and other residential construction nearly outpaced the amount of new construction of single-family homes in October. Single-family home construction is down nearly 8% since Feburary, and the value of multi-family homes was lower than it was at the start of this year.

Non-residential construction has also been skidding, with private non-residential construction seeing declines for 4 straight months, and down 6.8% since the end of 2023.

But yet the overall amount of new construction allegedly grew in October because of improvements and add-ons to current homes. Still doesn't seem like the sector was in good health at that time. The mortgage market has picked up recently, after the Trump Administration’s move from 2 weeks ago where they decided to buy $200 billion in mortgage debt. However, it’s not because more homes are being sold.

Last week, applications to refinance a home loan rose 20% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Applications were 183% higher than the same week one year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.16% from 6.18%, with points falling to 0.54 from 0.56, including the origination fee, for loans with a 20% down payment. That is the lowest rate since September 2024.

Good news if you bought a house in the last 3 years, but still not a level that many of us would refinance at. And the recent boost in that refi activity seems likely to end soon.

Interest rates moved much higher to start this week, as bond markets sold off following the Trump’s threats of new tariffs and escalating tensions over Greenland. The average rate on the 30-year fixed jumped 14 basis points higher, according to a separate survey from Mortgage News Daily.

“This matches the level seen the day before the announcement of the administration’s $200 billion mortgage bond buying plans. The last time rates were higher was December 23rd,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “In light of that announcement, why aren’t mortgage rates doing better? Simply put, the market has already reacted to that news to the extent allowed by its transparency.”

So the Trump Admin has pumped in more money to the economy (an inflationary move), and caused some capital flight due to his demented ramblings on Greenland and other foreign countries, which raises interest rates and counteracts the goals of buying up the $200 billion in mortgage bonds. That’s the type of “businessman brilliance” those low-infos voted for in November 2024, isn’t it?

We got some data today that may show why the Trump Admin felt a need to pump up the housing market. Because 2024 ended with a significant drop of Americans signing contracts to buy houses.

Stagnant mortgage rates, falling housing supply and ongoing economic uncertainty weighed heavily on homebuyers in December.

Pending home sales, a measure of signed contracts on existing homes, dropped 9.3% last month from November, according to the National Association of Realtors. Analysts were expecting a slight gain.

Sales were 3% lower than December 2024….

Sales fell month to month in all regions of U.S. and were higher annually only in the South.

Homes also stayed on the market longer in December, at an average of 39 days compared with 35 days in December 2024.

So it appears the construction sector and the housing market were two more major parts of our economy that were being held up by odd, temporary moves at the end of 2024.

I don’t see how those bumps show an improving overall trajectory, and it may well make things worse as the blips of remodelings and Treasury injections to lower interests rates unwind in the coming months. And all of this happy talk that I see people trying to pull on the economy isn’t something that seems to be connected to the reality and the data that we see in the everyday economy that people with actual jobs and lives have to deal with.